Final demand impact on output: A macro multiplier approach

In this paper a method of policy evaluation is designed which gives a deeper insight of the interactions between policy objective (total output) and policy control (final demand) at multi-sectoral level. An application, based on a regional social accounting matrix, illustrates how macro multipliers ruling the multi-sector/multi-industry interactions can be consistently defined and evaluated. We show that those aggregated multipliers are activated or neutralized by specific structures of the policy control and that no other outcome in the objective variable is reachable. A comparison with traditional impact multipliers is then performed. It shows how the proposed method, while providing the complete set of multipliers and associated structures, end ups with designing a more refined tool for policy evaluation.